Only last week the Obama administration was enthusiastically announcing that payroll employment had increased by 200,000 in December and the jobless rate was trending down. This week the number of people applying for weekly unemploymentbenefitsjumped last week to 399,000.

This followed three weeks of steady declines as retailers added help for the holidays, and typically applications soar in the first two weeks of the year as companies lay off temporary workers. It happens every year, but the labor department has a hard time adjusting for something that invariably happens every year.

But the American work force is smaller. Nearly one million workers have vanished under the Obama administration. They have dropped out of the labor force — they aren’t working and they aren’t looking — according to the Bureau of Labor Statistics. In the past two months, the labor force shrank by 170,000. If you adjust for that drop, the unemployment rate would be close to 11%.

Here’s a little history. Henry Morgenthau Jr. was FDR’s Secretary of the Treasury, and architect of the New Deal. He wrote:

We have tried spending money. We are spending more than we have ever spent before and it does not work…We have never made good on our promises. I say after eight years of the Administration we have just as much unemployment as when we started…and an enormous debt to boot.

President Obama in an exceptionally transparent move will ask Congress for greater power to shrink the federal government. He wants the kind of reorganizational power that was last held by a president when Reagan was in office. The power Obama wants would allow him to propose mergers that promise to save money and help consumers. Of course he promised this in his last State of the Union message a year ago.

He wants to combine six major operations: the Commerce Dept.’s business and trade functions; the Small Business Administration, the Office of the U.S. Trade Representative; the Export-Import Bank; the Overseas Private Investment Corp; and the Trade and Development Agency. The goal would be one agency designed to help business thrive.

The administration said that 1.000 to 2,000 jobs wold be cut, but through attrition, as people leave their jobs over time. Uh huh.

From Iain Murray:

Economic growth is not created from the top down. Government’s main job is providing a constant, consistent playing field — something Washington lawmakers have done much to undermine over the past decade.

Obama’s new chairman of the Council of Economic Advisers, Alan Krueger, announced that taxing the rich can spur economic growth. He said that there is growing income inequality in the United States, that this growing inequality contributes to slowing economic growth, and that raising taxes on the wealthy to offset the growing income inequality would actually stimulate the economy in the near term. (If this seems completely unintelligible, welcome to the club)

What he means is that Obama wants more money to spend on stimulus, and they want to get it from the rich who they plan to blame for everything — or everything they’re not blaming on the Republicans. Refer back to Henry Morgenthau Jr. above: “We have tried spending money. We are spending more than we have ever spent before and it does not work.”

One million workers have vanished from the U.S. labor force. Spending more money isn’t going to change that. In the past nine recoveries, the labor force had climbed an average of 3.5 million by this point.